India’s transition to electric mobility is driving a surge in EV insurance demand. As policies for EVs grow exponentially, the sector is becoming an attractive avenue for investment and business expansion. The demand for electric vehicle insurance in India has surged, registering a 16-fold increase over the past three years.
Let’s delve deeper by exploring what’s happening and what’s in it for investors.
What’s Happening?
According to internal data from Policybazaar, the demand for electric vehicle insurance in India has registered a 16-fold increase over the past three years.
Insurance for EV cars has risen from a mere 0.50% in FY23 to 3.50% in FY24, further increasing to 8.2% in FY25. Additionally, it saw a peak demand of 14% in March 2025.
Policies purchased for two-wheeler EVs have doubled from 10,000 to 20,000 this year. They have also accounted for 7% to 8% of all two-wheeler insurance policies over the past five years. Scooters continue to lead the race, making up nearly 98–99% of insured EV two-wheelers.
This surge indicates the growing adoption of electric mobility and the rising awareness of tailored insurance protection among consumers.
Increase in Demand for Comprehensive Coverage
As per the report, consumers are not only purchasing basic insurance policies — they are also increasingly seeking comprehensive coverage to safeguard their EVs. Some of the most popular add-ons include:
EV Cars: Zero Depreciation, Roadside Assistance, Battery Cover, Key and Lock Replacement, Invoice Price Protection, and Tyre Protection.
EV Two-Wheelers: Battery Protector (for theft or damage), Charger Cover, Zero Depreciation, and Roadside Assistance.
Delhi-NCR Leads the EV Insurance Market
In India, metro cities are leading the demand for EV insurance, accounting for 55% of total policies. Delhi-NCR leads the race with an 18.3% market share, followed by Bengaluru (16%), Pune (7.6%), Chennai (6.7%), and Mumbai-Thane (6.4%).
Metro cities in India are leading the demand for EV insurance, contributing 55% of total policies.
Furthermore, Tier 1 cities collectively account for 58% of all the policies, while tier 2 and tier 3 hold 30% and 12%, respectively.
What’s in It for Investors?
The rapid growth of EV insurance, along with EV adoption, presents a significant opportunity for investors. The growing demand for EV insurance in India may benefit insurance companies offering comprehensive coverage for EVs, as well as aggregators providing online insurance.
With the increasing adoption of insurance for EVs in tier 2 and tier 3 cities, these companies are likely to gain more business and premium collections, potentially improving profitability.
What’s Next?
The adoption of EVs in India is growing rapidly, driven by increasing awareness of environmental concerns and various government incentives. In 2024, over 50% of three-wheelers, about 5% of two-wheelers, and 2% of cars sold in India were electric. India is expected to become the largest EV market by 2030, with the industry projected to reach Rs 20 lakh crore, while the EV finance market size will be around Rs 4 lakh crore.
With the rapid adoption of EVs and strong government support, the EV insurance sector in India is poised for significant growth in the future.
*This article is for informational purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
